AI data centres could become Alberta's next major source of natural gas demand

CALGARY — As Alberta continues to pursue its goal of attracting $100 billion in artificial intelligence (AI) and data centre investment by 2030, energy sector leaders say the new tech boom is being increasingly viewed as a significant new source of natural gas demand that could eventually rival other major growth markets.On Thursday, Premier Danielle Smith announced a $4.6 billion natural gas-fired electricity project — the Greenlight Electricity Centre — in Sturgeon County that will supply power to a proposed data centre.The project — a partnership involving Pembina Pipeline Corporation, Kineticor Asset Management and Morgan Stanley Infrastructure Partners — will provide up to 932 megawatts of generation capacity and is the latest development in the UCP government’s plan to promote Alberta's energy resources..Smith said the project was specifically designed to protect Albertans from higher power costs while accommodating rapid growth in electricity demand, adding that the project demonstrates how Alberta intends to support AI growth while protecting grid reliability and limiting costs for consumers.The government has argued Alberta's vast oil and natural gas resources give it a significant advantage over competing jurisdictions seeking to attract AI infrastructure.In a statement to the Western Standard, Energy Minister Brian Jean's office said Alberta's resource base is one of the key reasons data centre developers are looking at the province."One of Alberta's biggest advantages for attracting data centres is our abundant oil and gas reserves," the statement said."Alberta has the fourth largest oil reserves in the world, almost nine times the size of the reserves in Texas; while Canada has the ninth largest natural gas reserves in the world — 65% of which are in Alberta. This is critical to their ability to produce their own power."Industry experts have estimated that the scale of natural gas demand associated with large AI developments could be substantial.Rough estimates show a 932-megawatt gas-fired power facility operating near full capacity could consume roughly 150 million cubic feet of natural gas per day, or approximately 55 billion cubic feet annually — around 1% of Alberta's current natural gas production.If Alberta succeeds in attracting multiple gigawatt-scale data centres, natural gas demand could eventually become large enough to require additional drilling activity, new power-generation projects and, with that, the possibility of further expanding the province’s energy infrastructure..Tristan Goodman, president of the Explorers and Producers Association of Canada, told the Western Standard that AI data centres have now become a regular topic of discussion among oil and gas producers and policymakers who are evaluating future energy demand across Western Canada.“No question, it's going to increase natural gas demand,” he said.However, while he expects AI development to increase demand for Alberta gas, Goodman cautioned that some projections may overestimate the number of facilities ultimately built in Canada.Goodman noted that much of the data-centre demand originates in the United States, where military and government-related computing projects often require infrastructure to remain on American soil.Major demand centres are also concentrated along US coastlines and in the southern states, creating additional infrastructure and connectivity challenges for projects located in Canada.Still, Goodman said Alberta possesses a competitive advantage that many rival regions cannot easily replicate — its climate."The positive thing we have, and it's certainly significant, is that data centres require tremendous electricity not just to run the servers, but also to cool the buildings," Goodman said."Whereas, of course, you won't have that problem in a large portion of the year in Canada.".Mark Scholz, president and CEO of the Canadian Association of Energy Contractors, welcomed the prospect of growing natural gas demand, saying any industry capable of creating sustained demand for natural gas would ultimately benefit Alberta's energy-service companies. However, he did say that it also remains too early to estimate how much natural gas future AI projects may consume, but added that the employment implications could be substantial if demand becomes large enough to require significant new drilling activity.According to Scholz, each active drilling rig supports approximately 300 direct and indirect jobs, while service-rig activity creates roughly another 70 positions."If it's enough to move the dial, the job piece is going to be huge," Scholz told the Western Standard."Any opportunities that are going to be drawing additional natural gas feedstocks, whether it's export for LNG or whether it's going to data centres or whether it's more natural gas power plants, this is all positive for energy service firms."

AI data centres could become Alberta's next major source of natural gas demand

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